Bank Ownership and Efficiency in China: What will Happen in the World's Largest Nation?

Berger, Allen N.; Hasan, Iftekhar; Zhou, Mingming

doi:10.2139/ssrn.924246

Cited by 292 publications

(466 citation statements)

References 33 publications

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“…It is consistent with Berger et al (2009) We consider this inconsistency due to the difference in sample period of two studies. The Chinese government has made considerable efforts to attract foreign strategic investors for its major banks, but the expected benefits from foreign minority ownership…”

Section: Resultssupporting

confidence: 63%

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Corporate governance and bank performance in China

Jiang

Guo

Zhang

2012

Journal of Chinese Economic and Business Studies

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This paper examines the effects of corporate governance on bank performance in China over the period [1995][1996][1997][1998][1999][2000][2001][2002][2003][2004][2005][2006][2007][2008]. Bank performance has improved significantly and the mean profit efficiency level is estimated at 61 per cent. The results suggest that differences in corporate governance have significant impacts on bank performance: banks with majority foreign ownership are most profitable while banks with majority state ownership are most unprofitable. We find no evidence that foreign minority ownership in domestic banks improves performance. Banks with more dispersed ownership are found to be more profit efficient.

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Section: Resultssupporting

confidence: 63%

“…Empirical studies (i.e. Bonin et al, 2005b, Berger et al, 2009 suggest improvements in performance after foreign investment in domestic banks.…”

Section: Introductionmentioning

confidence: 99%

Corporate governance and bank performance in China

Jiang

Guo

Zhang

2012

Journal of Chinese Economic and Business Studies

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“…Efficiency issues in financial institutions in developing countries are much less understood (Berger et al 2009). Furthermore, efficiency within the MFIs is typically evaluated with various industry benchmarks (Balkenhol 2009, reviews various ratios).…”

Section: Summary Of the Relevant Literaturementioning

confidence: 99%

Should all microfinance institutions mobilize microsavings? Evidence from economies of scope

et al. 2014

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We extend a recently developed generalized local polynomial estimator into a semiparametric smooth coefficient framework to estimate a generalized cost function. The advantage of the generalized local polynomial approach is that we can simultaneously choose the degree of polynomial for each continuous nonparametric regressor and the bandwidths via data-driven methods. We provide estimates of scope economies from the joint production of microloans and microdeposits for a dataset of Microfinance Institutions from over 50 countries. Our approach allows analysis on all Microfinance Institutions rather than only those offering just microloans. Moreover, the smooth coefficient estimator provides a general interface in which to account for both direct and indirect environmental factors. We find substantial scope economies in general, of about 10 % at the median, as well as evidence that economies of scope

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“…For a more general and detailed description and discussion about the background of Chinese banking sector, see Berger et al (2009).…”

Section: Chinese Banks: Their Background and Experiencementioning

confidence: 99%

The effects of focus versus diversification on bank performance: Evidence from Chinese banks

Berger

Hasan

Zhou

2010

Journal of Banking & Finance

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This paper investigates the effects of focus versus diversification on bank performance using data on Chinese banks during the 1996-2006 period. We construct a new measure, economies of diversification, and compare the results to those of the more conventional focus index, which is based on the sum of squares of shares in different products or regions. Diversification is captured in four dimensions: loans, deposits, assets, and geography. We find that all four dimensions of diversification are associated with reduced profits and higher costs. These results are robust regardless of alternative measures of diversification and performance. Furthermore, we observe that banks with foreign ownership (both majority and minority ownership) and banks with conglomerate affiliation -are associated with fewer diseconomies of diversification, suggesting that foreign ownership and conglomerate affiliation play an important mitigating role. This analysis may provide important implications for bank managers and regulators in China as well as in other emerging economies.

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Bank Ownership and Efficiency in China: What will Happen in the World's Largest Nation?

Cited by 292 publications

References 33 publications

Corporate governance and bank performance in China

Corporate governance and bank performance in China

Should all microfinance institutions mobilize microsavings? Evidence from economies of scope

The effects of focus versus diversification on bank performance: Evidence from Chinese banks

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